The main functions of government are the provision of non-market services, the regulation of economic and social conditions, and the redistribution of income between sections of the community. These activities are primarily financed by taxation and are carried out by entities in the general government sector. In addition to this core activity, governments can also own or control enterprises that:

sell goods or services to the public and which operate largely on a commercial, or market basis (public non-financial corporations); or

engage in financial intermediation (public financial corporations).

This chapter presents a range of information about the financial activities of the different levels of government in Australia, together with some explanatory material to assist with the analysis of these data. The system of Government Finance Statistics (GFS), which is used to derive the statistics presented here, provides statistical information on public sector entities in Australia, classified in a uniform and systematic way.

The GFS system is based on international standards contained in the System of National Accounts1993 and the International Monetary Fund's Government Finance Statistics Manual 2001. It enables users to analyse the financial operations and financial position of government in various ways - a specific level of government, jurisdiction (state/territory), institutional sector or set of transactions. Information about the GFS system can be found in Australian System of Government Finance Statistics: Concepts, Sources and Methods, 2005 (5514.0).